Friday, 30 Sep 2011

EUR Remained Bullish on Better than Expected Economic Data

Germany's approval Thursday to increase the size and flexibility of the euro zone's bailout fund and better than expected U.S. economic data pushed the ERU/USD pair above 1.36 Thursday, though it has pared some of the gains since.

Economic News

USD - Better than Expected Economic data boosts USD

The USD received a boost Thursday after the release of better than expected Unemployment Claims data as well as Pending Home Sales results. After falling earlier in the day versus riskier currencies following Germany's approval to the size and flexibility of the euro zone's bailout fund, which boosted risk appetite, the greenback returned to gains following the release of the US economic data.

For today, traders may be advised to follow the release of the Chicago PMI and Revised UoM Consumer Sentiment as a continuing trend of better than expected economic releases may boost the dollar further versus its counterparts.

In midday trade, the single currency was at $1.3620 compared with $1.3544 late Wednesday and at ¥104.47 compared with ¥103.74, boosted by the passage of the amendments to the European Financial Stability Facility in Germany which helped boost risk appetite and supported the common currency. The common currency has lost some steam later in the day as positive economic data from the US boosted the USD.

For today traders should follow general market sentiment as well as economic indicators from the US, a return of risk appetite to the markets may boost the EUR back above 1.36.

JPY - JPY Gains versus Counterparts

JPY saw a reversal of its downtrend mid trading Thursday as global markets roped and risk aversion returned to trading. The Yen gained almost 100 pips versus the GBP and almost 70 pips versus the EUR. Versus the USD the Japanese currency remained mainly in range.

For today, traders are advised to follow economic data from the US and Europe as a continuation of bearish sentiment will likely push investors to safe heaven currencies and boost the Yen further.

Crude Oil - Crude Rallies on Better than Expected US Data

Thursday, light, sweet crude for November delivery was up $1.84, or 2.3%, to $83.05 a barrel on the New York Mercantile Exchange. A drop in U.S. weekly jobless claims and Germany's vote to approve an expanded euro-zone rescue fund boosted optimism. The prospect of containment of the Euro-zone debt crisis lifted hopes for increase in global oil demand.

Traders are advised to follow the release of economic data from the Euro-Zone and US today as the release of better than expected data will likely boost Oil prices further, possibly towards the $85 a barrel mark.

Technical News

EUR / USD

The EUR/USD has gone increasingly bullish in the past few weeks, and currently stands at the 1.3615 level. The weekly chart's Slow Stochastic supports this currency cross to rise further today. This is supported by the daily chart's Slow Stochastic. Going long with tight stops may turn out to bring big profits today.

GBP / USD

The daily chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, the 8-hour chart's RSI is already floating in the overbought territory indicating that a bearish correction might take place in the nearest future. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

USD / JPY

The pair has been range-trading for a while now, with no specific direction. The Daily chart's Slow Stochastic providing us with mixed signals. The weekly charts do not provide a clear direction as well. Waiting for a clearer sign on the hourlies chart might be a good strategy today.

USD / CHF

The cross has experienced much bullishness last week, and currently stands at the 0.8960 level. There is much evidence in the chart's oscillators that supports a possible bearish correction today. This is supported by the daily chart's Slow Stochastic. Going short with tight stops may turn out to bring big profits today.

The Wild Card

Gold

Gold prices are once again dropping, and it is currently traded around $1601 per ounce. And now, the daily chart's Slow Stochastic is giving bullish signals, indicating that gold prices might go up. This might give forex traders a great opportunity to enter a very popular trend.

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